The ‘Liberal Media’ and State Austerity

Scaring readers with right-wing research

On March 12, a front-page article in the New York Times warned that the value of the federal government’s debt, if Medicare, Medicaid and Social Security obligations are included, totals $79 trillion—yes, with a T. Less than three weeks later, another front-page Times article (3/30/10) alerted readers that states’ pension obligations to public employees tops $5 trillion. Truly shocking figures, especially when the size of the entire U.S. economy is a measly $14 trillion.

These articles exemplify a trend in mainstream media discussions of budget deficits and state debt that make sensational and deeply conservative assertions about the costs of already threadbare social safety nets in the United States. They rely almost exclusively on the assumptions, arguments and data of “free-market” think tanks and economists, failing to incorporate the views of left or liberal economists who dispute the need to even calculate such sums.

In the first instance, the Times drew on the conservative Cato Institute’s Jagadeesh Gokhale to arrive at the $79 trillion figure. Besides obfuscating the role of rising private sector healthcare costs as a major (and solvable) problem and contributor to the final weight of the number, this total represents how much money the U.S. would need to amass today to meet all its future obligations in perpetuity.

Doug Henwood, editor of the Left Business Observer, recently commented (WBAI, 3/13/10) on the passive acceptance of this methodology by the Times: “There’s not much point in even thinking about it. Tomorrow’s pensions can be paid for by tomorrow’s taxpayers. They don’t have to be accounted for by today’s, but this technique can be used to scare people into submission.”

In a similar fashion, the Times article on state pensions drew uncritically on work by the American Enterprise Institute to arrive at its stunning pension-debt figures. The only quasi-dissenting voice in this article came from a (hardly radical) Goldman Sachs report, which acknowledges that states have around 30 years to close any pension-related deficits. Henwood’s rejoinder applies again: Why focus on total pension debt when this system is run on a pay-as-you-go model?

The cumulative effect of such articles is that they lend credence to the notion that supporting the elderly, the sick and the poor is unaffordable, even as an economic crisis makes their lives more difficult. As Dean Baker, economist at the liberal Center for Economic and Policy Research (2/10), recently wrote:

The enormous suffering created by this crisis should be the main focus of economic policy. However, a well-funded public relations campaign has managed to largely push the economic crisis to the back burner and instead focus on the federal budget deficit. This anti-deficit campaign has helped to derail efforts to address the downturn, leading to an enormous amount of unnecessary suffering.

Debates over what the public can afford are being carried out most fiercely at the state level, from California to New Jersey, where programs have already been slashed to close budget gaps. Faced with the same gaping budget problems as elsewhere, though, legislators in Oregon passed measures last year to increase taxes on the wealthy and on corporations. When those same forces fought back by getting a referendum on the issue placed on the ballot this past January, state residents confirmed their commitment to the taxes. The state will get $727 million for social services and education. Another world—or at least another state tax environment—is possible!

Though the New York Times(1/27/10) did run a short article on the referendum’s passage in January, it has received very little notice in the corporate press generally, not even meriting a mention in outlets like Time magazine and the Chicago Tribune. But Oregon’s divergent choices would play a significant role in a healthy debate on budget deficits and debts: Preserving—or strengthening—state programs and pension commitments is as technically feasible as whittling them away.

The point is not that we should be carefree about the effects of public debts and budget deficits on the economy. On the contrary, we need our press system to critically explore the meaning of these developments—from all sides, not just the “free market” perspective the Times is letting dominate its pages, fostering animus toward social safety nets.